IRS: Illegal sports betting is… illegal. So stop it.

By WVUA 23 Digital Reporter Rachel Seale

TUSCALOOSA, Alabama – With the upcoming NFL season approaching, the Internal Revenue Service's Atlanta Division of Criminal Investigation says illegal sports betting is still a crime that can lead to criminal charges such as tax evasion and money laundering.

According to a press release, Demetrius Hardeman, special agent in charge of the IRS-CI Atlanta Field Office, said many sports fans may think that illegal gambling is harmless and does not affect anyone.

“However, illegal gambling activities provide criminal organizations with money to finance violent and illegal activities,” Hardeman said.

Sports betting is permitted by authorized, licensed sportsbooks in 38 states. Alabama is not one of these states.

According to the same press release, the illegal US sports betting market will generate annual revenues of over $700 million.

Over the past four years, the IRS-CI opened 151 investigations related to illegal sports betting. These investigations totaled more than $178.8 million and resulted in 71 prison sentences that averaged more than two years.

Last year, a federal court grand jury in Birmingham indicted 114 people nationwide in connection with an illegal tax evasion scheme involving millions of dollars in sports betting.

According to the indictment, the defendants “accepted hundreds of millions of dollars worth of bets” from 2019 to 2021, making nearly $15 million in profits.

Fans who participate in sports betting must report all winnings to the IRS on their annual tax return. The IRS also requires those who place bets to “keep detailed records of all gambling transactions,” including bets placed and total winnings and losses.

According to the IRS, ignorance of tax laws does not relieve you of your responsibility to accurately report your gambling winnings. If you have any questions about reporting your winnings, contact a tax professional or visit the IRS website.